Crude prices stabilise as geopolitics and demand levels remain in focus

Crude prices attempted to rebound on Wednesday, following a sharp decline driven by speculation about a potential ceasefire in the Middle East.

However, concerns linger over the possibility of escalating tensions and the impact on Iranian oil infrastructure.

Ongoing geopolitical risks keep traders on edge, as any further escalation could disrupt supply routes and provide short-term support for crude prices despite prevailing market fundamentals.

Conversely, weak demand fundamentals suggest a bearish outlook for oil prices in the medium to long term. US crude inventories surged, exceeding expectations and indicating softer consumption. The US Energy Information Administration (EIA) also revised its global demand growth forecast downward. Additionally, China’s economic slowdown has dampened expectations for a recovery in demand, while a slowdown in industrial production in the US and China weighed on oil prices.

The market is shifting attention to the FOMC minutes and US inflation data, which could influence the Fed’s monetary policy and short-term oil fluctuations. Further data on US crude inventory levels may introduce market volatility as traders reassess demand outlooks.